The role of ants in the modern economy

Ants, and other members of nature’s resource recovery team, help clear away the dead-wood from the environment. Our economies also need a bit of a prune now and then. We’re not getting it right now, and the longer it goes on, the bigger the risks become.

A life without ants is not worth living.

Who would clean up all the mess?

There are 1.5 million ants for every human on earth. Even though they can weigh a fraction of a gram, they account for about the same total biomass as humans.

There’s a lot of them. And they’re part of the Earth’s resource recovery unit. Along side, fungus and bacteria and a bunch of other bugs, they’re on clean up duty.

They take dead animals and plants and break it down. They recycle all this bio-matter into compost to feed back into the creation of life. They eat dead lizards so we can eat lettuce and hold hands and sing ‘It’s a small world after all.’

They are the archetypal destroyers.

I quite like the way they map it out in the Hindu faith. God takes three forms: Brahma the Creator, Vishnu the Sustainer, and Shiva the destroyer (sometimes expressed as Arnold the Terminator).

You need all three to keep the world ticking over. Without the destroyer element, the world would just get full. Endless creation would just end up in more and more stuff. The world would get cluttered. It would be practically impossible to find your keys.

And eventually, creation would drive itself into a dead end. There’d be no more room for creating any thing new. No resources to make anything new with.

Everything would stop.

No holding hands and singing then.

And the economy works the same way.

Business are born. They live and thrive. They adjust to new realities, and if they can’t, then they die. It happens to the best of them.

Their resources then become the compost that nourishes the next generation of businesses. The office gets refitted. Their line of credit gets directed somewhere else. Their typewriters become art installations at hipster cafes.

And ‘progress’ is driven by a Darwinian engine of evolution. Businesses with cumbersome systems and processes die out. More efficient businesses take their place.

The average standard of business practice gets better – more efficient. As a society we achieve more with the same amount of resources. We get better at giving people exactly what they want.

This, in the capitalist doctrine, is progress.

Now the system’s far from perfect, and there’s a lot more to quality of life that an efficient business community. But still, it seems like an important thing to aim for.

And the capitalist machine doesn’t really work with out it.

We need a vital destroyer element because we need growth.

The modern economy is like a shark. (Guess who’s been watching a lot of the Nature Channel lately…) It needs to keep moving to survive. If it stops, it dies.

And as we bump up against harder resource constraints, we’ll need to source growth more and more from innovation – finding better, more efficient ways to do things.

And this ‘business composting’ mechanism is one of the best drivers of innovation we have.

But it’s in trouble.

Low interest rates are a ball and chain around econo-Shiva’s ankle.

Because low interest rates mean that inefficient businesses can drag out the inevitable.

Rather than face foreclosure and bankruptcy, they can just keep rolling over their loans. As long as they can keep hitting their repayment targets out of their measly revenue, they can keep shuffling along the road.

And the lower rates go, the smaller and easier those repayments become.

It stops mattering how good you are at business. It stops mattering how profitable you are.

All that matters is that you can eek out enough revenue to keep kicking the can down the road.

At best, it removes the pressure to get your house in order and find more profitable ways of doing things. At worst it creates an economy of living-dead zombie businesses.

Low interest rates become a life-support for terminally ill corporations. But we don’t want to prolong their misery. It doesn’t do them or us any good. We don’t need to keep them alive at all costs. We need to let them die with dignity, under the loving pillow of disciplining financial conditions.

Take a look at this chart here. This is monthly bankruptcies in Australia.

There’s been a clear downward trend emerge over the past couple of years. In some ways, obviously this is a good thing. But it hasn’t been driven by a surging economy.

Which to me suggests that it’s been driven by falling interest rates… I’m not sure that’s such a great thing.
And sure, bankruptcy is a hard story for the business owners and staff. I can see that.

But if the business isn’t working, it isn’t working. Low interest rates are a life-support, but they’re not a magic bullet.
The grief of loss is coming at some point. The only question is when.

And if we erode the dynamism of the economy in the process by keeping zombie companies alive, then everybody loses in the long run.

More tough love from Jon.

But I also don’t really know what the solution is. I’m certainly not advocating raising interest rates just to get a bit of blood-letting going in the business community.

But this is one of the many new challenges that come with life in a low-interest world. And I’m not sure many people are awake to it.

Not a good article. Sounds like dribble. If you are serious, then get to the point with your economic reviews instead of providing a distribe of nonsense for us to read. And your assumptions are ridiculous.

Interesting article but I don’t think that the alignment of Interest Rates and Bankruptcies are necessarily aligned as if that was so it would imply that the highest interest rates in the last decade occurred some time in 2012. Could bankruptcies have fallen due to the reluctance of many to do anything adventurous post GFC??

Could this be an opportunity to leverage the rich academic capital from Australia to start manufacturing in Australia again? Australia is rich in skilled labour and could aptly apply this to automated manufacturing technologies (eg. CAD/CAM/CAE) which would contribute hugely to the declining economy. Manufacturing has always been a key contributor to economic development. We could also benefit from the low interest and dollar rates to promote our export market and be globally competitive. Its a great opportunity to restart the cycle using user innovation strategy to deliver quality at competitive rates since we could consider servicing our local market with the abundance of raw materials. We need to stimulate growth through our own infrastructural development. Our internet lag will cause further declines in the economic progress. Australia needs to charge up its small business sector to decrease reliance on large organisations to support employment and monopolies. Business hours should support a 24 hour strategy to increase value.

I think you have overlooked the fact that these days banks require you to have a business plan and some substance before they will lend money for start-up capital. Therefore it follows that business are more regulated and serious. So, less cowboys are starting up and falling down than a decade ago. that’s a good thing, by the way!

Ants as destroyers – Nah! Compare humans and ants and it’s pretty easy to see which are the true destroyers. Ants are happy to eat food that has passed its “Expiry” date. Humans invariably kill living things to eat.

And what do we create? We create rubbish, pollution, waste. Even our flashest cars are rubbish in 20 short years. And during that time, they spew tons of pollutants into the atmosphere, and shred rubber and drip oil all over the place. Let’s not mention cell phones. Rubbish in 2 or 3 years… Notice the trend?

We are busy poisoning this planet just as fast as we possibly can, with no thought of tomorrow. The seas are being overfished to crisis point. Our land, rivers, lakes, air and oceans are all polluted, by our own hands. Aussie, I know, is running short of drinkable water… The glaciers are disappearing, the planet overheating, and humans are becoming virulent, destroying our own host… And ourselves.

We are insane! We need to look at this long before we need to worry about capitalistic concerns.

Hi Jon
Good grief, sorry Jon, but I have never before read such dribble with so many assumption taken as fact, with so many conclusions based on your assumed facts .
Not one of your best posts Jon.
regards
Rudolf

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